On March 2, 2023, NBC New York reported that Chatham attorney Raleigh Douglas Herbert received a prison term for stealing more than half a million settlement funds belonging to his several Brooklyn clients, as well as close to $100,000 in COVID-19 relief money, local prosecutors said.
Herbert pleaded guilty to second- and third-degree grand larceny as well as first-degree fraud scheme on December 16, 2022, and was sentenced to one to three years in prison.
In a statement, Brooklyn District Attorney Eric Gonzalez said that Herbert defrauded 16 of his clients in Brooklyn and embezzled about $493,000 from 2015 to 2021 by depositing checks from negotiated settlements into his lawyer escrow account.
Herbert allegedly lied to his clients about why they didn’t get the money in order to conceal these thefts, including blaming COVID-19-related court closures or asserting that the victims had liens that prevented him from paying them when no such liens existed, according to the report. In addition, Herbert committed fraud by submitting false loan applications through the COVID-19 Paycheck Protection Program (PPP) managed by the United States Office for Small Business Administration.
Gonzalez added, “This defendant repeatedly violated his oath as an attorney and betrayed the trust of his clients by pocketing hundreds of thousands of dollars in settlement money and COVID-19 relief funds to which he was not entitled. Criminal conduct in the legal profession is unacceptable, and today’s sentence sends a strong message that it will be prosecuted vigorously,”
According to the district attorney’s office, 16 of the defendant’s victims have received reimbursements totaling about $470,000 from the Lawyers’ Fund for Client Protection of the State of New York.
Michael J. Knight, Executive Director of the Lawyers’ Fund for Client Protection, said that the Lawyer’s Fund aims to restore the public’s trust in all lawyers by compensating the financial harm caused by the statistically few who caused such losses.
Reports showed that on February 1 and May 2, 2022, respectively, Herbert was arrested based on two separate but later combined indictments. Thereafter, Herbert was arrested for the third time, on December 7, 2022, on theft charges concerning $77,000 from eight more clients who showed up after his second arrest.
Herbert’s disciplinary history includes being suspended on March 5, 2021, by the state’s Supreme CourtAppellate Division for the Second Judicial Department, upon motion of the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts to immediately suspend Herbert from law practice upon finding that he is guilty of professional misconduct for misappropriation of client funds.
He was later disbarred by the Court on June 15, 2021, pursuant to the Special Referee’s report filed after June 10, 2021, hearing at which Herbert failed to appear. The Referee’s report sustained all charges that Herbert misappropriated client funds, failed to timely file a closing statement with the Office of Court Administration, and failed to maintain the required bookkeeping records for his escrow account.
Source: NBC New York
